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Federal Trade Commission Calls for Breakup of Facebook

Facebook was sued by dozens of state and the federal government on Wednesday. The suits allege that the social media giant has been abusing its dominance on the internet and engaging in anticompetitive practices.

The Federal Trade Commission (FTC) suit seeks to break up Facebook, asking a federal court to force the company to sell-off assets like Instagram and WhatsApp as independent businesses.

“Facebook has maintained its monopoly position by buying up companies that present competitive threats and by imposing restrictive policies that unjustifiably hinder actual or potential rivals that Facebook does not or cannot acquire,” the commission said in the lawsuit filed in federal court in Washington, D.C.

Facebook said it is reviewing the lawsuits, and pointed out that the FTC approved their Instagram and WhatsApp acquisitions. Facebook purchased Instagram in 2012 for $1 billion, then purchased WhatsApp two years later for $19 billion.

“Years after the FTC cleared our acquisitions, the government now wants a do-over with no regard for the impact that precedent would have on the broader business community or the people who choose our products every day,” Facebook said in a statement.

Attorneys general from 48 states and territories said they were filing their own lawsuit against Facebook, regarding the concern about the power Facebook has accumulated on the internet and in the world.

“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition,” New York Attorney General Letitia James said at a press conference Wednesday. “By using its vast troves of data and money, Facebook has squashed or hindered what the company perceived to be potential threats.”

The states’ suit does not ask for Facebook to be broken up, instead they ask that a federal court halt Facebook’s anti-competitive conduct in general. Calling for a court to require Facebook to notify state officials of any future acquisitions valued at $10 million or more.

James noted that the states’ lawsuit was not only regarding Facebook’s acquisition of rivals but also its treatment of competitor companies. Saying Facebook ‘squeezed oxygen” from the tech industry with its practices.

“It also sent a clear message to the industry: Don’t step on Facebook’s turf,” James said. She quoted one tech executive who said they feared “the wrath of Mark,” referring to Zuckerberg.

Facebook’s share price fell by as much as 4 percent after the news.

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